VAT 0%: What? Where? When?

About the zero VAT rate and the procedure for confirming it when importing unique technological equipment, analogues of which are not manufactured in Russia. Inspired by a recent case of successful, but fraught with certain difficulties, customs clearance of equipment for the textile industry.

I always try to remind everyone that the system of customs legislation is a complex mechanism that requires a detailed understanding, controlled by the relevant executive authority. I always advise you to carefully sort out all the nuances of the regulations of the customs procedure awaiting you and the cargo you are moving before importation. Before importation, it is necessary to study which HS code will be assigned to your product, which duty rates correspond to this HS code, which permits will be needed.

When moving foreign goods, and even more so expensive equipment, it is necessary to study independently or with the help of a customs representativeThe list of equipment, the import of which into the territory of the Russian Federation is not subject to value added tax. The list is approved by the relevant Decree of the Government of the Russian Federation. This is not a closed document. In the context of technological progress and global digitalization of the economy, the Ministry of Industry and Trade of Russia has provided a mechanism for adding additional equipment names to it.

Be prepared for the fact that such a procedure may take at least half a year, this is due to the mandatory confirmation of the classification code HS from the Federal Customs Service assigned to the type of equipment planned for import (preliminary classification decision). But, as practice shows, the game is worth the candle: after all, 20% VAT (namely, this tax rate is introduced from January 1, 2019) is a significant saving of money when importing equipment, the cost of which is often calculated in millions of rubles.

And so we got close to the key reference point of the equipment that you have been choosing for so long, waiting for, bonuses from the installation of which you are already looking forward to, ready for shipment. It is at this stage that it is necessary to clearly realize: the concepts of «to be entitled to VAT exemption » and «to confirm your right to VAT exemption»  are not identical! And it is at this moment that it depends on your correct, coordinated actions whether you will receive a VAT rate of 0% when importing equipment or not.

The first thing that needs to be taken care of is collecting the necessary package of documents for customs purposes. But this is only half of the success.Do not forget: the customs authority must definitely make sure that the information you have stated in the documents accurately describes the imported equipment. In order to identify the equipment and the information about it declared in the customs declaration, the customs authority conducts customs inspection in almost 100% of cases. If for some reason it is impossible to do this (weather conditions, low temperatures, humidity, overloading, tipping, unique packaging, the opening of which may entail the removal of equipment from the manufacturer's warranty, etc.), be sure to ask the supplier (manufacturer) to provide photos from the shipment. Photos should contain the maximum possible amount of information (marking) for its identification.

And most importantly: before importing the equipment, notify the customs authority about this in order to take appropriate measures and develop a joint acceptable solution. Otherwise, the equipment will still have to be inspected or provide a cash deposit or a bank guarantee to the customs authority in order to obtain permission to export the equipment to the enterprise or production site and inspect it there after commissioning, but this is a completely different story, which requires a huge amount of time and energy associated with the withdrawal of large monetary resources from circulation.

Only the import of technological equipment is exempt from VAT, but more on this in the next article. In the meantime, I wish everyone a successful unpromising modernization of production!

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